The novel coronavirus pandemic has dramatically changed life for many Chicagoans. Residents are staying at home, traffic is way down, and most restaurants are closed (aside from those that offer delivery and take-out). So, how is this affecting the city’s real estate market?
A couple weeks ago, a handful of real estate agents Curbed Chicago asked about the impact were optimistic. Open houses were still happening, hand sanitizer was dispensed at showings, and there were still plenty of new homes being listed. But since then, the number of COVID-19 cases has steadily risen and Illinois issued a “stay-at-home” order for residents until April 7.
“Having been through the market in 2008, this definitely feels different. Consumer confidence is a big part of the success of our businesses,” says Amy Oetter of Dream Town Realty.
“Most of my first-time buyers and seller/buyer combos are in the ‘sit and wait’ stance,” she says. “But, there is no question that showings have slowed or diminished. My listings either have no calls, or if we had showings, they were canceled.”
A client of Oetter’s went under contract on a home the week before the “stay-at-home” order who was uncertain on whether to proceed. “She’s super excited about the purchase, but worried at the same time. It’s almost as if she’s hoping there could be a pause button pushed to see what the next two to three weeks brings,” she says.
Gov. Pritzker’s orders require nonessential businesses like retail and gyms to close—real estate is considered essential. So, agents are still allowed to work under this mandate, but the way they do business has definitely changed, says Jill Scott of Compass.
“We are still working with clients and navigating this to the best of our ability. Lenders, title companies, movers are all still open for business. It’s new territory for everyone. We are certainly working differently while practicing social distancing,” she says.
Last week, Scott had three closings that all went smoothly. There were a few virtual showings over the weekend and a few more lined up this week. The current listings she has on the market will continue to be active, but as for new homes on the market? She’s waiting to go live and instead marketing the homes as “coming soon.”
“As soon as this passes, we’ll go live and allow potential new buyers to tour the homes. In short, without question showings are down,” she says. “I foresee the spring market being pushed to summer, making July and August busier than years past. Time will tell.”
Another real estate agent, Tracy Meredith with Ask Nagel Realty, closed on a home last week for a client who worked as a pilot for American Airlines—he was “sweating bullets,” about selling his condo, she says. He had recently purchased a home in suburban La Grange and was selling his place in the city. A buyer came in near the asking price of $289,900 and wanted to close in 30 days—so Meredith and her client went with that offer.
“While my client perhaps would have multiple offers resulting in over asking price—it really wasn’t worth the risk of losing the buyer that was so confident he could close in 30 days,” she says. “Sometimes it is not all about the dollars but the deal that you are confident you can get over the finish line.”
She has several searches going for homebuyers and says she feels like there are less options compared to last year at the same time. A handful of her clients have chosen to put things on hold for the time being—including a physician that was traveling between Houston and Chicago that was looking to purchase a one-bedroom condo in River North and Streeterville area.
While many of the agents we reached out to had clients that canceled home purchases that were under contract, Mary Summerville of Dream Town is “finding that everyone varies case by case.”
“I have first time buyers who are under contract on a new home they love but were wondering if they should try to delay their closing until they sublet their rental lease. I told them, ‘If you love the place and are planning to stay for three to five years, you’ll see the market bounce back. It always does.’”
Even though there is a lot of uncertainty, Hadley Rue of Dream Town thinks that with the dip in inventory, there could be higher demand for what’s still on the market.
Meredith agrees, “If I had a buyer with a vacant property I would list now as your online audience is huge. People have so much time on their hands to look.”
In lieu of in-person showings, many agents are offering virtual tours of properties. The only chance buyers have at seeing a property in person is if the home is vacant and the agent agrees to a showing.
“People are very hesitant to go see and show homes in person,” says Aaron Masliansky of Dream Town. “I also would like to maintain social distancing myself. I’ve shifted to promoting virtual reality tours or asking sellers to send videos or FaceTime calls.”
In addition to live video tours, many agents are also using Matterport which which allows viewers to explore a 3D simulation of a home stitched together with high-resolution photos. In some cases, technology just isn’t an adequate replacement for an in-person showing.
“My listing in Ukrainian Village (a two-flat with tenants) would be impossible and irresponsible to show at the moment. We have offered a virtual tour but most buyers will want to check out the quality of the building since it is turn of the century brick stock,” Meredith says.
If you are in the process of buying or selling your home, it can be hard to figure out the right move in this market. The best thing to do is hire someone with experience in a downturn like this, says Berkshire Hathaway HomeServices agent, Ivona Kutermankiewicz.
“Those seasoned brokers navigated bumpy markets and know how to take action to make transactions happen and not shy away from difficult situations,” she says.
For those who were hoping to sell a property, Meredith says now is the perfect time to do all the prep work.
“There are so many projects that one can get done this spring that they can do themselves like organizing, decluttering, painting, and cleaning. I have had a few of my clients FaceTime me to walk around their homes so I can give them some ideas of things to do to prep to sell.”
And if you were hoping to buy a home? While plenty of deals have closed without issue, many agents are also taking a more conservative, wait-and-see approach.
“In two weeks, I think we’ll all really know more—is this a speed bump to slowly move past or pothole that gives us a flat tire. And, who this impacts likely depends on the type of buyer and or seller they are,” says Oetter.